Industry-Specific Determinants of Intra-Industry Trade in India

C. Veeramani
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C. Veeramani: Indira Gandhi Institute of Development Research, Mumbai, India

Indian Economic Review, 2007, vol. 42, issue 2, pages 211-229

Abstract: The paper analyses the industry-specific determinants of intra-industry trade (IIT) in Indian manufacturing industries. We find that the intensity of IIT would be larger if an industry is characterized by a greater degree of product differentiation. The intensity of IIT reduces if the spectrum of production activities in an industry is confined to few locations because of plant level scale economies. We find a negative relationship between IIT and the extent of multinational involvement, indicating that foreign direct investment replaces export sales of differentiated products to the host countries.

Keywords: Intra-Industry Trade; Industry-Specific Determinants; India (search for similar items in EconPapers)
JEL-codes: F12 F14 (search for similar items in EconPapers)

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